European Outlook: Asian stock markets mostly moved higher, although Nikkei and CSI remained marginally in the red, while Hang Seng and especially ASX moved higher, led by Commonwealth Bank of Australia. The tech rout that hit markets yesterday has started to calm down as the Nasdaq 100 managed to pare losses going into yesterday’s close. Investors remained largely defensive though in Japan ahead of the Fed meeting, but U.S and FTSE 100 futures are moving up. Oil prices are also higher on the day and the front end Nymex future is trading at USD 46.33 per barrel. Today’s calendar has inflation readings from Spain, Sweden and the U.K., with the latter seen falling back slightly to 2.6% y/y (med 2.7%) from 2.7% in April. German ZEW investor confidence meanwhile is expected to rise to 21.0 (med 21.5) from 20.6 in May. Meanwhile there are reports that Labour and Conservative MPs are “plotting” to force PM May to take a soft Brexit stance, while the Prime Minister continues to reshuffle her team and politics.

U.S. reports: Budget deficit widened to $88 bln in May just wide of median $87.0 bln, a large deterioration from the $53 bln deficit in May of last year. This estimate roughly aligns with the CBO Monthly Budget Review released June 7 as a change in the corporate tax deadline appeared to pull those dollars into April.

UK: Moody warned yesterday that UK’s minority government poses a “credit negative” risk. The prime minister’s Conservative Party is forming a government with Northern Ireland’s DUP, with the combined seat total standing at a weak 328 out of 650 parliamentary seats. Things have settled yet, just one week ahead of the start of EU exit negotiations, as there is pressure on the prime minister to resign following a disastrous election campaign. A snap poll of 700 member of the UK’s Institute of Directors found a “dramatic drop” in confidence following the hung parliament outcome of the election last Thursday.

Main Macro Events Today

UK CPI – Data is highlighted by May inflation figures today, where CPI expected to stay unchanged after logging a 2.7% cycle high in April. This would fit the BoE view. The central bank has clearly signaled that it is looking through the current phase of above-target inflation, anticipating a return to 2.0% target next year.

German ZEW – After slightly mixed survey data in May, German ZEW investor confidence for June expected to rise in the headline reading to 21.5 from 20.6 in the previous month, backed by the ECB’s cautious approach to exit steps and the improved overall economic outlook, although with the ECB meeting as well as the U.K. election last Thursday much could depend on when the answers got in and uncertainty about Brexit prospects, global political events and the prospect of further rate hikes in the U.S. will likely weigh on sentiment.

US PPI – Headline May PPI is seen sinking 0.0% from 0.5%; core may rise 0.2% vs 0.4% or 2.0% y/y.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.

Visit Website to READ more Market news.

Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Outlook: Asian stock markets were mixed, with Chinese stocks under pressure as financial and developers headed south. The CSI 300 lost more than 1% and the Hang Seng is down 0.2%, while Nikkei and ASX are moving higher. Financials also weighed on Japan’s stock markets, while defensive stocks gained ahead of the FOMC announcement, leaving the Nikkei up a modest 0.2%, while the ASX 200 gained 0.8%. FTSE 100 futures are up, as Sterling is under pressure again, while U.S. futures are down ahead. All eyes are on the Fed which is expected to hike rates by 25 bp, but may not give details on balance sheet normalization yet. There is speculation that China’s central bank may follow, which is adding to pressure on Chinese markets. China industrial production and retail sales growth were unchanged from the previous month. The European calendar has U.K. labour market data and EMU production numbers.

FX Update: The dollar majors have been settled in narrow ranges into the Fed’s policy announcement and statement. EURUSD has been orbiting 1.1200 and USDJPY has continued to oscillate around the 110.00 level. Sterling has steadied after rebounding some of the ground lost since last week’s UK election, with markets buoyed by prospects for a softer Brexit stance, though concerns about the viability of the new, fragile minority government, along with the prime minister’s future, remain. As for the Fed, a 25bp hike is widely expected while there is a degree of uncertainty about what tone the central bank’s guidance will take. The Fed expected to stick with its tightening bias but may signal a lowered pace of policy normalization, which will be accompanied with reduced growth forecasts. Overall, much of this will have been discounted by markets, though we see some risk for dollar gains on the view that the Fed leaves the door open for another 25bo rate hike before year-end.

U.S. reports: Flat May U.S. PPI headline with a 0.3% core price increase beat estimates with a largely expected 3.0% drop for the goods component. There were no revisions to April’s 0.5% headline jump and the 0.7% surge in the ex-food and energy component. On an annual basis, PPI slowed to 2.4% y/y compared to 2.5% y/y for April. But the core rate rose to 2.1% y/y versus 1.9% y/y. Goods prices declined 0.5% on the month, versus the prior 0.5% rise, with energy tumbling 3.0% and food costs dipping 0.2%. Services prices rose 0.3% following the 0.4% April gain, with trade prices climbing 1.1% and transportation/warehousing costs falling 0.5%. The PPI report isn’t usually a market mover, however U.S. equities have recovered somewhat to start the session in the wake of the 0.3% core PPI rise, following a shallow recovery in global stocks after two days of U.S. tech sector liquidation.

Final May German HICP inflation was confirmed at 1.4% y/y, as expected and down from 2.0% y/y in April. The Easter effect was largely to blame for the sharp swings over the past months, with holiday related prices spiking in April only to fall back again after the end of the Easter holidays. Energy prices increases also fell back again in May and added to the drop in the annual rate, as gas prices declined -3.4% y/y and prices for heading rose 11.7% y/y, down from 30.1% y/y in the previous month. The German economy may be steaming ahead and the labour market looking increasingly tight, but so far at least that has not led to a substantial uptick in wages, which is what is also keeping the ECB on hold, despite stronger growth numbers.

Main Macro Events Today

US CPI – May CPI data should reveal a -0.1% headline with the core rate up 0.2%. This follows April figures which had the headline up 0.2% and the core up 0.1%. If data in line with forecast would leave the headline y/y rate slowing to 1.9% from 2.2% in April and the core y/y rate ticking down to 1.8% from 1.9% in the month prior.

US Retail Sales – May retail sales data is out today and should post a 0.1% headline decline a flat ex-autos figure. This follow the April report which revealed a 0.4% headline and a 0.3% core pace. The report faces downside risks from the weak auto sales data and an anticipated decline in gasoline prices which could weigh on gas station sales.

FOMC Meeting – The Fed began its 2-day meeting, with widespread expectations for a 25 bp increase in the rate band to 1.0% to 1.25%. What will be crucial for the markets is the tone of the statement and what policymakers suggest about the path of normalization. The Committee is likely to leave its dot forecast of three tightenings this year unchanged, as the tight labor market should offset the slowing in Q1 growth and the softening in inflation. While the risks to the economy should remain balanced, it will be interesting if the tone is a little more dovish given the slowing in Q1 and other more recent data.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to READ more Market news.

Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Outlook: Asian stock markets headed south, after the Fed hiked rates and tweaked reinvestments. Financials and exporters were under pressure, while defensive stocks held up. There is speculation that the BoJ could make some inference to exit strategies at its upcoming meeting, which could boost the Yen and hurt exporters. Still, the -0.35% drop in the Nikkei is modest, compared to the sell offs in Hang Seng and ASX 200, which both lost more than 1%. Investors trying to place funds into superannuation accounts in a bid to avoid regulatory changes coming into effect on July 1 were said to have underpinned yesterday’s rally in the ASX, but with AUD on the rise, stocks are under pressure. U.K. and U.S. stock futures are also down. The Fed may have been less dovish than some expected, while U.S. data release yesterday were disappointing and sparked fresh concerns about the health of the global economy. With the Fed turns out of the way, the focus turns to BoE and SNB meetings today, with both central banks expected to keep policy steady. The data calendar has final May HICP from France and Italy, as well as U.K. retail sales and EMU trade data.

FOMC hiked the funds rate band by 25 bps, as widely expected, to a 1.00% to 1.25% band. In a surprise, however, the Fed outlined details on balance sheet normalization, stating it intends to start the unwinding process this year if the economy evolved as anticipated, Yellen said that the Fed could implement the balance sheet unwind “fairly soon,” if the economy continues to perform as expected. The Fed also outlined it’s initial cap sizes. The dot plot was also little changed from March, and suggests yet one more tightening this year. The statement noted the economy continues to expand moderately, and while job gains have moderated, they have been solid nevertheless. Household spending has picked up, and business investment has continued to expand. The Fed noted the recent decline in inflation, but said it’s expected to stabilize around the 2% objective over the medium term. Risks are roughly balanced but the Committee will monitor inflation closely. The dove Kashkari dissented in favor of an unchanged stance. The tone of the statement, and the fact that the Committee still plans to start balance sheet normalization this year, is a tad less dovish than the market had priced in after the CPI and retail sales data.

U.S. reports: revealed a weak round of May retail sales and CPI data. The US May CPI drop by 0.1% while U.S. retail sales underperformed with a 0.3% May headline and ex-auto drop, following tiny revisions that were upward in April but downward in March. We also saw a 0.2% April business inventory drop, though this decline was expected. For retail sales, we saw 0.3% May headline and ex-auto drops after small prior tweaks that should allow an uptick in the savings rate to 5.4%, as consumers remain reluctant to spend despite heightened confidence. For CPI, a 0.1% May headline drop with a 0.1% core price rise rounded up from respective figures of -0.144% and 0.063%, with weakness in apparel and medical care alongside the expected 2.7% energy price drop.

Main Macro Events Today

UK Retail Sales & BoE MPC’s Policy meeting – The Old Lady of Threadneedle Street is widely expected to leave policy settings unchanged. The tone of the minutes will interest, and given the tricky political backdrop will likely show a stepped-up degree of dovishness while remaining in the bounds of an overall neutral policy stance. We will see also today retail sales contracting by -0.8% m/m in official May data, after a stellar 2.3% m/m gain in April.

CAD Manufacturing Shipments – Shipments expected to expand 0.7% m/m in April after the 1.0% gain in March. Manufacturing employment was nearly flat in April (-0.6k) after a 24.4k rise in March, while the latest jobs report revealed a 25.3k bounce in May.

US Data – May trade price data is out today and should show import prices unchanged while export prices rise by 0.1% on the month. WTI prices decline by 5.1% in May which should weigh on import prices. Philly Fed index is seen falling to 24.0 in June from 38.8. Initial jobless claims are expected to dip 3k to 242k for the June 10 week; industrial production is forecast to be flat in May, while capacity use holds steady at 76.7%. NAHB housing market index may slip to 69 in June from 70.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.

Visit Website to READ more Market news.

Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Outlook: After BoE and Fed spooked markets, the BoJ’s decision to keep policy on hold and maintained its promised for ongoing stimulus. Banks and financial were underpinned and the Nikkei is currently up 0.67% on the day, the Hang Seng gained 0.33% and the ASX 0.11%, while the CSI remained slightly in the red. U.K. and US stock futures are also moving higher and Bund futures started to stabilize in after hour trade yesterday, suggesting that bond and stock markets are starting to settle after the sell off yesterday. Today’s European calendar is quiet, with only final Eurozone HICP numbers, leaving markets to ponder the implications of this month’s round of central bank announcements.

U.S. reports: revealed surprisingly robust June figures for Empire State and Philly Fed, alongside an 8k initial claims drop to a lean 237k, while industrial production revealed the expected May growth pause from factory and vehicle sector setbacks despite robust mining and utility sector growth, with May trade price weakness that accompanied downside surprises in the May CPI report. For producer sentiment, the figures are refusing to meaningfully unwind the big Q1 surge, as the Empire State index popped to a 3-year high of 19.8 while the ISM-adjusted measure rose to a 6-year high of 56.2, alongside a June Philly Fed dropped to a still-robust 27.6 alongside a June repeat of the solid 59.2 ISM-adjusted figure from May. The GDP data remain poised for a Q2-Q3 bounce despite the downdraft recent retail sales and inflation reports.

BoE Spooks Markets, SNB Firmly on Hold: The BoE left rates unchanged, but still managed to shock markets. After reacting to last year’s Brexit referendum with further easing, it seemed reasonable to assume that the BoE would take a cautious approach in the wake of the “election” chaos especially after recent data releases disappointed and showed still weak wage growth. In the event though, it seems the “hung parliament” hasn’t dented the “smooth Brexit” assumption that was the base of the May inflation report and the number of those opting for rate hikes rose to 3 from just one at the previous MPC meeting. SNB keeps policy on hold, as expected. The central bank confirmed its expansionary policy, with interest on sight deposits unchanged at -0.75% and the mid point Libor target also at -0.75%. At the same time the central bank confirmed its commitment to “remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration”. The CHF remains “significantly overvalued”, according to the central bank. And while the SNB acknowledged that the global economy strengthened further and the new baseline scenario “anticipates that economic developments will remain favorable”.

Main Macro Events Today

EU Final HICP – Inflation data should confirm today the overall Eurozone number at 1.4% y/y.

U.S. Michigan Consumer Sentiment – The first release on June Michigan Sentiment is out today and a slight increase is expected to 97.3 from 97.1 in May and 97.0 in April.

US Housing Starts and Building Permits – May housing starts data is out today and a climb to a 1,215k is anticipated in May from 1,172k in April and 1,203k in March. Permits are seen at 1,250k from 1,228k in April and completions should improve to a 1,140k pace from 1,106k in April.

Fedspeak – Dallas Fed moderate hawk Kaplan (voter) plans to take part in a panel discussion today at the Rotary Club from 12:45 ET.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.

Visit Website to READ more Market news.

Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

The FOMC shocked the markets with a more hawkish than expected stance last week. So too did the BoE, while recent comments from the ECB and BoC also indicate they are starting to move toward the exit. Policymakers are still focusing on inflation and growth dynamics as their guides. But with the traditional Phillips Curve relationship seemingly broken, it could be a bumpy ride for central bankers and the markets as exit strategies are mapped out.

United States: This week’s Fedspeak will be especially interesting after the 180 degree shift from the FOMC where policymakers took a decidedly hawkish spin despite soft inflation and real sector data. The Fed showed surprising resolve in its actions as it looked past the recent data disappointments after the tepid 1.2% GDP growth clip in Q1. The contingent of speakers includes several FOMC voters. On the data front, housing numbers will be scrutinized after the larger than expected 5.5% drop in housing starts in May. Existing home sales for May (Wednesday) are forecast rising 0.9% to a 5.620 mln rate after tumbling 2.3% to 5.570 mln in April. New home sales (Friday) for April are projected rebounding to a 0.580 mln rate after plunging 11.4% to 0.569 mln in April. Other data this week includes the Q1 current account (Tuesday), with the deficit expected to fall to -$128.6 bln from Q4’s -$112.4 bln. There’s also the April FHFA home price index (Thursday), the Markit manufacturing PMI (Friday), the KC Fed manufacturing survey (Thursday), and weekly jobless claims.

Canada: Canada’s calendar has wholesale trade (Tuesday), with shipment values expected to expand 0.5% m/m in April after the 0.9% bounce in March. Retail sales (Thursday) are seen growing 0.4% m/m in April. Higher gasoline prices should support retail sales, but weaker vehicle sales will weigh. The CPI (Friday) is expected to slow to a 1.4 y/y pace in May from the 1.6% growth rate that was in place during March and April. CPI is projected to grow 0.1% m/m in May after the 0.4% gain in April, as a drop-in gasoline prices weighs. There is nothing on the BoC’s schedule this week. The CPI report could impact, although Wilkins appeared unworried by the weakness in the core CPI, blaming it on past activity. Hence, another round of soft core inflation would not challenge the widespread perception that rate hikes will come sooner than had previously been expected.

Europe: The start of official Brexit negotiations has finally arrived. Today Michael Barnier, the European Commission’s Chief Negotiator and David Davis, Secretary of State for Exiting the European Union, will launch Article 50 negotiations. EU 27 leaders will meet on June 22 to review the latest developments in the negotiations and in the margins of this meeting. The start of the talks may be dominated by political posturing, ultimately a hard approach from either side would only hurt the whole of Europe and an amicable deal will be in everybody’s interest. However the data calendar is pretty quiet. Preliminary Markit June PMI readings (Friday) will be the main highlights. Eurozone current account and BoP data are slated, along with preliminary consumer confidence for June. There’s also German PPI, and the final print on French Q1 GDP, expected to be confirmed at 0.4% q/q, as well as the national business confidence report. Supply comes from Germany, which issues 30-year Bunds on Thursday. The ECB’s latest economic bulletin meanwhile is likely to give merely a more detailed account of the ECB’s latest economic projections, which Draghi already presented at the last policy meeting.

UK: Data last week had shown a more acute negative growth figure, while recent sterling gains and weaker oil prices should help curb inflationary pressures, potentially offsetting hawkish arguments at the BoE. There is also the issue of a delicate political backdrop, with a much-weakened prime minister having to cobble together a deal with the DUP, a small party, in an attempt to make her minority government work. Brexit is yet another uncertainty, with negotiations due to begin on Monday. The UK calendar this week is fairly quiet. Monthly government borrowing data are due (Wednesday), while the June CBI industrial trend survey (Thursday)will highlight. A dip to a reading of +7 is expected in the total orders headline of the CBI survey, after +9 in the month prior.

Japan: The May trade report (Monday) is expected to reveal a surplus of JPY 100.0 bln, versus the JPY 481.1 bln previously. The April all-industry index (Wednesday) should rise 1.0% m/m from the prior 0.6% decline. Also, the BoJ releases the minutes to its April 26, 27 meeting (Wednesday), and Governor Kuroda will speak at the annual meeting of the National Association of Shinkin Banks. Deputy Governor Iwata will speak at a meeting of business leaders (Thursday).

Australia: Australia’s calendar is sparse this week. The Reserve Bank of Australia releases the minutes to the June meeting (Tuesday), where rates were held steady at 1.50%. The lack of change was expected, while the Bank maintained a note of optimism on the inflation and unemployment outlook. RBA Governor Lowe participates (Monday) in a discussion panel at the 2017 Crawford Australian Leadership Forum in Canberra. The Q1 Housing Price Index is due Tuesday, and will be of interest.

New Zealand: New Zealand’s calendar is highlighted by the Reserve Bank of New Zealand’s meeting (Thursday). No change is expected to the current 1.75% rate setting. It’s been at this level since the predicted easing on November 10.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.

Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Outlook: Asian stock markets are mixed, with Japan outperforming and the Nikkei up more than 1%, after the S&P 500 rose to a fresh record high and Fed’s Dudley said that U.S. expansion has “a long way to go”. Hang Seng and CSI were little changed in cautious trade ahead of the MSCI decision on the inclusion of Chinese shares in the index. The ASX meanwhile was weighed down by property shares. U.K. and U.S. stock futures are also moving higher, suggesting that yesterday’s rally will be extended today. The DAX is starting to eye the 12900 marks again and the FTSE 100 is firmly above 7500. With stock markets eying new highs core yields are likely to continue to nudge higher, while? Eurozone peripheral bond markets should continue to benefit from the improvement in sentiment. Yesterday’s first official meeting of Brexit negotiators brought a conciliatory tone, but little detail apart from a time table and the confirmation that there won’t be talks on a post-Brexit trade deal alongside the divorce agreements. The calendar today remains quiet, with only Eurozone current account and BoP data.

EU and U.K. agree timetable for Brexit talks, with initial negotiating groups tackling first Citizens’ rights, financial settlement and finally other separation issues. An additional dialogue on Ireland/Northern Ireland has been launched, but there was no mention of a post-Brexit trade deal which the U.K. initially wanted to negotiate alongside the divorce terms. Nothing further really happened yesterday at the first talks between chief negotiators Barnier and Davis and the next round of talks will start on July 17, with further rounds scheduled for the weeks starting August 28, September 18 and October 9. There reportedly wasn’t an offer from the U.K. yet on the rights for the EU citizens in the U.K.

Canada U.S. lumber dispute simmers, underpinning export uncertainty: a Bloomberg article from yesterday summarizes the viewpoints of the two sides in the dispute, with the U.S. upbeat for a quick resolution while Canada is cautious. The lumber dispute is among a variety of trade issues between the two nations, but is the most prominent and dates back to the Obama administration. Other industries remain at risk of increased tariffs, with Globeandmail.com reporting that the U.S. could add steel pipe makers to its target list of Canadian industries. The ongoing jockeying for tariff protections by various U.S. industries is a timely reminder of one of the key uncertainties facing Canada’s growth outlook. Wilkins, in her speech last week that shook up the BoC policy outlook, acknowledged the political uncertainty surrounding the Trump administration. That uncertainty shows few signs of diminishing, which we suspect will help keep the current monetary policy rate intact for a while longer.

Germany: The Producer Price inflation falls back to 2.8% y/y in April from 3.4% y/y in the previous month. This is a tad lower than anticipated, with the decline in oil prices from the highs earlier in the year one of the factors bringing both producer and import price inflation down again. The ECB has already cut back its inflation projections due to a revised oil price forecast. so the data doesn’t change the ECB outlook.

Main Macro Events Today

CAD Wholesale trade – Canada’s calendar has wholesale trade, with shipment values expected to expand 0.5% m/m in April after the 0.9% bounce in March.US Current Account – The Q1 current account deficit is expected to widen to -$124 bln. As a percentage of nominal GDP, the gap is expected to widen to -2.6% from -2.4%.SNB Jordan Speech – SNB Governing Board Chairman Thomas Jordan will be at the opening of Swiss International Finance Forum, in Bern, in which it will also be involved in a panel titled “Moving away from the expansive monetary policy: what are the effects on financial markets and the real economy?”.Fedspeak – VC Fischer and non-voter Rosengren will be at the podium at a conference on macro-prudential policy at the Riksbank. Also, the moderate hawkish voter Kaplan discusses monetary policy and the economy at a Commonwealth Club event. Governor Powell testifies on fostering economic growth before the Senate Banking Committee.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Outlook: Asian stock markets mostly headed south, after losses on Wall Street and in Europe yesterday. MSCI finally decided to include 222 large Chinese companies in its 2018 Emerging Markets Index, and the CSI is outperforming with a 0.28% gain, while the Hang Seng is down -0.38% and the Nikkei -0.32%, with the latter weighed down by a stronger Yen. The ASX underperformed and lost more than 1% as oil prices remain under pressure. The DAX rallied to new record highs yesterday, before profit taking and a broad mover lower in global equity markets as commodity supply concerns amid rising oil production in Libya and Nigeria cast fresh doubt on the efficacy of the OPEC oil agreement while a 26% drop in Chinese steel exports added to concerns about the global growth outlook. U.K. and U.S. stock futures are also down and the fresh bout of risk aversion will keep a lid on bond yields. For the Eurozone, the good news though is that peripheral yield spreads over the German benchmark didn’t blow out yesterday. Today’s data calendar remains quiet, with only U.K. public finance data and a German 30-year Bund sale.

London clearing remains bone of contention. After the EU proposal that called for greater EU oversight of clearing houses based in foreign jurisdictions and included the option of enforced relocation, BoE’s Carney yesterday suggested improved cross-border oversight of clearinghouses that should be based on “deep cooperation” between jurisdictions, adding that a clearing deal would help to keep the financial system resilient. ECB’s Coeure meanwhile stressed that the EU’s clearing regime was “never designed to cope” with major clearing houses operating outside of the EU, adding that moving clearing to within the EU’s jurisdiction would be justified if they pose a major risk to stability, as so far, the regime provides “EU authorities with very limited tools for obtaining information and taking action in the event of a crisis”. The ECB has long tried to get London clearing under its own control and while London fought back with backing from a European court, the issue is back on top of the agenda as Brexit draws nearer.

Fedspeak: Yesterday Fed’s Rosengren said low rates pose financial stability issues, in his comments at the Riksbank macroprudential conference. The Boston Fed president (not a voter this year) turned decidedly hawkish about a year ago and has maintained that outlook ever since. He believes low rates put intermediaries and economies at risk, make fighting future recessions more difficult, and make it more likely central banks will have to resort to non-traditional policies. Additionally, Fed Evans was speaking yesterday as well. Chicago Fed dove Evans said inflation needs to rise and the target should not been seen as a cap but a symmetric target, though he’s voted for rate hikes given improvement in the economy. He’s still ambivalent about the timing of the next hike, which could take place later in the year, while the global environment appears to be holding back inflation, which could allow for a shallower path of rate increases. Otherwise the economy bounced back after the election, with “quite good” fundamentals, which give inflation a chance to get back to 2%. He sees 3% growth as achievable in the short-term, but sustaining it given labor and productivity constraints is another thing, while the U.S. is fast approaching its natural rate of unemployment.

Canada: growth maintains momentum but uncertainties lurk, suggesting that while the time frame for rate hikes has been moved ahead, the Bank can maintain the current setting through mid-year at least. Of course, the upbeat (“hawkish”) view of the economy last week moved ahead expectations for lift-off, and even put the announcement next month in play. And the economic data since Wilkins/Poloz have supported the Bank’s view that the run of encouraging broad-based growth will prove sustainable. But other events have highlighted the uncertainties around Canada’s outlook. Most prominently, the plunge in WTI crude oil to a seven month low and the evolution of U.S. trade policy. The key line from Wilkins was that they are “assessing whether all of the considerable monetary stimulus presently in place is still required.” An assessment of the mix of firm economic data but weak oil/commodity and uncertain U.S. trade policy will likely keep them grounded until later this year, if not January of next year. There will be another round of BoC-speak next week (Poloz panel, Patterson speech), which will be looked to for fresh guidance on the policy outlook.

Main Macro Events Today

US Existing Home Sales – May existing home sales data is out today and should post a 0.7% increase to a 5.610 mln pace for the month after dropping 2.3% to a 5.570 mln pace in April. The NAHB did tick higher in May with a rise to 69 from 68 in April but housing starts disappointed with a decline in the headline pace to 1.092 mln from 1.156 mln in April.

UK Borrowing data – Monthly government borrowing data are due (today), for which a deduction to £7.3B is expected from £9.6 seen last month.

Speeches – BoE chief Economist Andy Haldane is due to give a speech today in Yorkshire.

RBNZ Meeting – New Zealand’s calendar is highlighted by the Reserve Bank of New Zealand’s meeting today. No change to the current 1.75% rate setting is expected. It’s been at this level since the predicted easing on November 10.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.

Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Outlook: Asian stock markets stabilized in China’s CSI outperformed again helped by the inclusion of 222 mainland equities in the MSSCI index. The ASX, which tanked yesterday with oil also bounced back. The front end WTI future is little changed on the day at USD 42.53, U.K. and U.S. stock futures are also little changed The Reserve Bank of New Zealand held the policy rate unchanged, as expected. Bund and Gilt yields already moved higher yesterday, led by a jump in the 10-year Gilt above the 1% mark after hawkish comments from BoE’s Haldane, which sees a case for raising rates soon. Bunds outperformed, but the 10-year yield also nudged higher, while Eurozone spreads were mixed at the close with Portugal underperforming. Equity markets and oil prices remain in focus although the calendar is starting to pick up with French business confidence indicators as well as the U.K. CBI industrial trends survey and the ECB’s latest economic report. EU leaders will also start to gather for a 2-day Brexit summit, after chief negotiators from both sides met for the first time officially last Monday. The Eurozone also has preliminary consumer confidence data in the afternoon.

US Reports: A 1.1% U.S. May existing home sales bounce to a 5.62 mln rate trimmed the April drop to 5.56 mln from a 5.70 mln cycle-high in March to almost exactly track estimates, as sales gains moderate in Q2 after weather boosts in the prior two quarters. U.S. existing home sales came in on the perky side, but had little impact on forex markets. Existing home sales are on track for a 5% rise in 2017, following a 3.9% increase in 2016 and a 6.5% rise in 2015, but a 2.9% 2014 “taper-tantrum” drop. Additionally, U.S. MBA mortgage market index rose 0.6% in data released yesterday, in addition to a 1.0% drop in the purchase index and a 2.1% rise in the refinancing index for the week ended June 16. Yet the average 30-year fixed mortgage rate was unchanged at a low 4.13% last week after readily absorbing the Fed’s rate hike, projections and balance sheet reduction schedule announcements.

RBNZ: The Reserve Bank of New Zealand held the policy rate at 1.75%, as expected. Low for long remains in place, with Wheeler again saying, “Monetary Policy will remain accommodative for a considerable period.” And a dovish bias was retained, as the Governor concluded that “Numerous uncertainties remain, and policy may need to adjust accordingly.” This was the same as in May. In March he said “Numerous uncertainties remain, particularly in respect to the international outlook, and policy will need to adjust accordingly.” In other words, it looks like they won’t hesitate to add accommodation if downside risks to the economy manifest. The onus remains on the inflation and growth data, with additional undershoots setting the stage for further easing.

UK: The new UK government’s legislative goals have been announced in the Queen’s speech. Eight of the 24 outlined are Brexit related, which include bills to convert EU rules into UK law, and others concerning such issues as trade, immigration, agriculture and sanctions. A number of key manifesto pledges have been axed or delayed as a consequence of the Conservative Party having lost its majority at the elections earlier in the month. Chancellor Hammond on Monday said that the economy would be the priority in Brexit negotiations, which appears to be position shift away from prioritizing immigration. This could potentially be supportive of the pound, though issues about the fragility of the minority government (which is reportedly struggling in negotiations with Northern Ireland’s DUP) are likely to be the overriding concern for markets. BoE Chief Economist Haldane gave a speech as well yesterday in which he said he is ready to vote for a rate hike — notable as he voted to keep policy settings unchanged last week. His vote would bring the hawks in favour of hiking the repo rate by 25bp to four — which is half of the members on the Monetary Policy Committee.

Main Macro Events Today

US Initial Jobless Claims – Initial claims data for the week of June 17 should reveal a slight increase to 240k from 237k in the week prior and 245k in the week before that. Claims have been holding at very tight levels lately and the June average expected to be 236k, down from 241k in May and 243k in April.

Canadian Retail Sales – Retail sales are seen growing 0.9% m/m in April, while the ex-autos sales aggregate gains 0.7%. Higher gasoline prices should support retail sales, but weaker vehicle sales will weigh.

MPC Forbes Speech – BOE MPC voting member Kristin Forbes is due to give a speech today at the London Business School.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.

Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Outlook: Asian stock markets are narrowly mixed in tepid markets, as oil prices stalling below USD 43 per barrel. Fed speakers didn’t challenge the path to further rate hikes and markets are taking a wait and see stance. Mainland Chinese shares are fluctuating after outperforming yesterday, FTSE 100 futures are in the red, while U.S. futures are slightly higher. A very cautious end to a volatile week then, which should leave core bonds underpinned and yields remaining low. BoE’s Forbes may have added more force to her calls for a rate hike in a speech late yesterday saying she sees “some urgency” to tighten monetary policy, but this was her last speech as she is leaving the MPC. The EU summit with May on Brexit talks, saw the British PM making an offer for the rights of EU citizens, but the devil here lies as usual in the details and the future of citizens on both sides is far from secured. The issues were not discussed at the summit and it will be up to the negotiating team to hammer out a final deal. Today’s calendar brings preliminary June PMI readings, which we expect to move sideways at high levels. France has final Q1 GDP and Italy releases orders data for April.

US Reports: 3k U.S. initial claims uptick to 241k in the BLS survey week trimmed the prior 7k drop to 238k (was 237k) from 245k at the start of June and 255k in the final week of May. Claims have undershot the 2016 average of 263k in every week of 2017, and continue to oscillate around tight levels above the 44-year low of 227k in the President’s Day week. Claims are averaging 240k in June, versus a similarly tight 241k May average, and higher prior averages of 243k in April, 251k in March, and 241k in February. Today’s 241k BLS survey week reading was above May’s 233k figure but below prior survey-week readings of 243k in April, 261k in March, and 247k in February. U.S. FHFA home price index rose 0.7% in April to 248.2, after a 0.7% March gain to 246.6. That’s up 6.8% y/y. Seven of the 9 regions surveyed posted gains.

UK: Brexit Battle Finally Gets Underway One year after the Brexit referendum official talks finally got underway. There still isn’t any clarity on how the future relationship between the U.K. and the rest of the EU will look once the U.K. exits the block. But, a year on, both sides are in a very different situation, with the EU going into the discussions strengthened, while the U.K. government is looking increasingly fragile. Central banks on both sides cautiously look on as the direction and outcome of the talks will have major implications for rates going forward.UK hints at transition period for Brexit. Chancellor of the Exchequer Hammond yesterday suggested the prospect of a four-year transitional period, adding to signs that he is pushing for a softer Brexit stance. Hammond said in a radio interview that in his view a three to four-year transitional period might be necessary, after the U.K. officially exits the EU in 2019.

Canada: Canada’s retail sales yesterday improved 0.8% m/m in April after a downwardly revised 0.5% gain in March (was +0.7%), leaving a nearly as projected gain. But the ex-autos sales aggregate surged 1.5% m/m in April following a revised 0.1% dip in March (was -0.2%), which was well in excess of projections. Higher prices played a large role in lifting the value of total and ex-autos retail sales. Total retail sales volumes were up a modest 0.3% m/m in April after the 1.1% jump in March. While the ex-autos sale aggregate came in on the firm side of projections, the gain in total sales alongside the more modest rise in sales volumes was roughly as expected.

Main Macro Events Today

Eurozone & German PMI – A slight dip in the Eurozone manufacturing index is anticipated to 56.8 from 57.0, with a dip in the services reading to 56.2 from 56.3. Those would suggest ongoing robust activity but at a slightly slower growth pace. This scenario wouldn’t challenge the ECB’s main assumption of a recovery that is strengthening and broadening, and hence would have limited market impact. The German manufacturing index is anticipated to 59 from 59.5, with the services reading to 55.5 from 55.4.

CAD CPI – CPI is expected to edge up 0.1% m/m in May after the 0.4% m/m gain in April. Gasoline prices dropped in in May, which drives projection for a slowing in the pace of month comparable CPI growth. The CPI is seen moderating to a 1.4% y/y pace in May from the 1.6% y/y growth rate in April.

US PMI & New Home Sales – A slight increase in the US manufacturing index is anticipated to 53.0 from 52.7, with the services reading to 53.7 from 53.6. The New Home Sales number is also out today and an increase of 16.8% is anticipated from the -11.4% seen on April.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.

Visit Website to READ more Market news.

Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

European Outlook: Asian stock markets were mixed overnight, with Japan outperforming as a weaker Yen underpinned exporters. Yesterday’s weakness in U.S. durable goods orders saw Treasury yields declining and risk appetite waning as investors starting to fret again about the health of the world economy. Oil prices are holding above USD 43 per barrel, but Hang Seng, CSI 300 and ASX are all slightly in the red as are U.K. and U.S. stock futures. This should keep Bund and Gilt futures underpinned and core yields down, especially as Draghi once again defended the ECB’s stimulus measures. Today’s data calendar has Italian confidence data as well as the U.K. CBI Retailing Survey. The ECB is hosting its annual forum in Portugal.

FX Update: The dollar majors remained in fairly narrow ranges, though there has been some movement. AUDUSD logged a one-week high of 0.7609, while USDJPY logged a five-week high at 112.07 before turning lower, to around 111.70. The retreat in USDJPY came after the U.S. said that it had detected preparations by the Syrian regime for another chemical attack, with the White House warning that Damascus would pay a “heavy price” in the event it launched another chemical attack. The oil price rebound flagged, and the global stock market rally sputtered in Asia, a backdrop conducive for yen buying. Elsewhere, EURUSD has continued to gravitate toward the 1.1200 level, with the market lacking directional ambition, despite lower U.S. yields following weaker headline durables data yesterday, and a softening in the price indicators in the Dallas Fed index. Cable has been settled in the lower 1.27s, below yesterday’s eight-day high at 1.2759. USDCAD has settled near 1.3250, above yesterday’s 1.3212 low.

US Reports: The U.S. durables report revealed a 1.1% May headline orders drop with a 3.4% transportation orders decline and a 0.1% ex-transportation rise that tracked our estimates. We saw a 10.2% May defense orders plunge, mixed equipment data, a lean 0.2% inventory gain and a firm 0.8% durable shipments rise that was in line with our 2.4% Q2 GDP estimate, after an assumed Q1 trimming to 0.9% from 1.2%. U.S. Chicago Fed National Activity Index dropped to -0.26 in May after jumping to 0.57 in April (that was the highest point since 0.59 from March 2014; the index was as low as -0.84 in July 2013). Additionally, yesterday U.S. Dallas Fed manufacturing index slipped to 15.0 in June after edging up to 17.2 in May from 16.8 in April. The rise to 24.5 in February put the level at its highest since early 2006. It was generally in negative territory from January 2015 through September 2016. Despite the headline declines, it’s still a pretty solid report.

Draghi raises concerns over Greek debt sustainability. The central bank head said in a letter to an EU lawmaker that “until sufficient detail has been provided on the debt measures, serious concerns persist regarding the sustainability of Greece’s public debt”. Currently ECB staff is not “in a position to complete a fully-fledged debt-sustainability analysis of Greece’s public debt”. Greece has been pushing for the ECB to include Greek debt in QE purchases, but Draghi’s comments highlight again that that is still unlikely in the near future.

Main Macro Events Today

ECB’s Draghi – ECB’s President Draghi speaks today at the ECB forum in Central Bank in Portugal at 08:00 GMT.

BOE – Financial stability Report is out today for the 1st time this year from BOE. Meanwhile Gov Carney is due to speak today about Stability Report in London at 10:00 GMT

U.S. Consumer Confidence – June consumer confidence data should reveal a dip in the headline to 116.0 from 117.9 in May and 119.4 in April. Confidence measures are still hovering near post-recession highs but there is some downside risk to the release as we saw a decline in the first Michigan headline to 94.5 from 97.1 last month.

AUS Gov. G. Debelle – Deputy Governor Guy Debelle speaks at the Global FX Code of Conduct Launch (via video link). The Reserve Bank of Australia next meets on July 4th. We expect no change to the current 1.50% rate setting.

Fedspeak – Fedspeak will resume with Chair Yellen atop the roster this week, as she will take part in a conversation with Lord Nicholas Stern, president of the British Academy on “Global Economic Issues” today from 13 ET. SF Fed’s Williams speaks on “The Global Growth Slump” from Australia at 4:05 ET, followed by Philly Fed’s Harker on the economic outlook and trade from 11:15 ET and Minneapolis Fed’s Kashkari takes town hall Q&A from 17:30 ET.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.

Andria PichidiMarket AnalystHotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.